Sen. John McCain tours New Orleans Friday. One of President Bush's big-money 2004 fundraisers has agreed to help the Arizona Republican. (Associated Press) (By Alex Brandon -- Associated Press)
Money's Going to Talk in 2008
Michael E. Toner, the chairman of the Federal Election Commission, has some
friendly advice for presidential candidates who plan to be taken seriously by
the time nominating contests start in early 2008: Bring your wallet.
"There is a growing sense that there is going to be a $100 million entry
fee at the end of 2007 to be considered a serious candidate," Toner said
in a recent interview.
The jockeying for the presidential nominations in both major parties is already
vigorously underway, as illustrated by the parade of GOP contenders on display
this weekend at a meeting of the Southern Republican Leadership Conference in
Memphis. For now, however, the main arena of competition is financial, as candidates
prepare themselves for a race most analysts believe will involve sums vastly
larger than those spent on previous presidential campaigns.
Many political operatives are expecting that the gradual breakdown of the public
funding system -- federal funds in exchange for spending limits -- that has
taken place in recent years will become complete in 2008. The result would be
candidates in both parties racing far past old spending records, and facing
new pressure to begin raising money far in advance of the election year.
Not all political finance experts and campaign operatives agree with Toner
that raising $100 million over the next 22 months is the price of admission
for candidates who want to establish credibility and compete on an equal footing.
The $100 million is nearly three times the previous threshold for being regarded
in national political circles as a first-tier candidate. But it is plain that
a number of factors have converged that will render obsolete old assumptions
about what it costs to run for president.
First among those factors is the 2004 precedent. President Bush and Democratic
nominee John F. Kerry decided then to do without public matching funds in the
nominating phase of the campaign -- money that came with a requirement to limit
spending to just $44.7 million each. They went on to raise $274.7 million and
$253 million, respectively, before accepting public funding for the general
election campaign in the fall. Their success established what many strategists
believe will be a new norm in presidential politics.
What's more, many analysts believe that 2008 will be a clash of such titanic
intensity that the nominees will reject public funding -- and the spending limits
that govern it -- even for the fall campaign. If so, most bets are that each
major-party candidate would need to raise in excess of $400 million by the Nov.
4, 2008, election. Candidates would want to raise as much of that money as early
as possible, so as not to waste precious campaign time holding fundraisers.
Steve Elmendorf, the deputy manager for Kerry's general election campaign against
Bush, predicted that accepting matching funds is a "thing of the past in
the primary and the general." Public funding of presidential campaigns
was started in 1976 in the wake of the Watergate scandal.
A final factor inflating the pressure to raise money early is Sen. Hillary
Rodham Clinton (D-N.Y.). She has a proven ability to raise money on a national
scale, and if she runs for president in 2008 she will raise the stakes for competitors
in both parties.
Other Democratic contenders, such as Sen. Evan Bayh (Ind.) or former Virginia
governor Mark R. Warner, would need to raise money aggressively to avoid being
swamped by sums. Many Republicans, meanwhile, believe that their candidates
must base their fundraising strategies on the assumption that Clinton will turn
down public financing and set a new standard for fundraising and spending in
the fall campaign.
One Republican 2008 operative, discussing campaign strategy on the condition
of anonymity, said it would be "irresponsible" for a candidate to
be thinking solely about spending needs for a primary election campaign without
weighing "the consequences of what Hillary is bringing to the financial
table and how quickly a potential nominee will have to turn his attention to
dealing with her campaign."
The practical effect of the revved-up fundraising race means that candidates
who do not enjoy national name recognition or a national fundraising network
must troll the country relentlessly to build relationships with wealthy individuals
in key donor states such as New York, California and Florida.
Take Bayh's schedule over a week last month. After appearing on a Sunday morning
talk show on Feb. 19, Bayh flew to Fort Lauderdale for a reception and dinner
hosted by Mitchell W. Berger, a lawyer and a leading fundraiser for Kerry and
former vice president Al Gore.
The following day Bayh headed to Los Angeles, where he stayed for five days.
He met with a Who's Who of West Coast money men, including DreamWorks co-founder
David Geffen, Phoenix Pictures head Mike Medavoy, 20th Century Fox co-Chairman
James W. Gianopulos and Artists Production Group executive Mark Canton. After
spending the weekend in Washington, D.C., Bayh flew to New York on Sunday, Feb.
26. He met with prospective donors on Monday and returned to Washington late
"It's the organizational prowess and ability to put together a national
organization to raise money that is the real test, and it's that ability that
translates into dough," said an adviser to a potential 2008 Republican
The standards of the "money primary" vary depending on a candidate's
strategy. For a front-runner, $100 million by Dec. 31, 2007, may be the goal,
but candidates trying merely to become the main challenger face a lower hurdle.
Ron Kaufman, who is helping Massachusetts Gov. Mitt Romney (R) explore a bid,
said the competition to become the challenger would require much less because
$40 million to $50 million is more than enough to compete in the early caucuses
and primaries. A victory early on would spark a financial outpouring to sustain
the remainder of the campaign.
Kaufman's view was shared by supporters of Sen. Clinton, who is expected to
have little trouble raising $100 million by the end of 2007 if she runs. The
Clinton backers said a legitimate challenger to her would need to raise between
$35 million and $40 million to finance strong campaigns in Iowa, New Hampshire
and other early states.
If the pattern of 2004 holds for 2008, the huge surge in small donations over
the Internet and through direct mail will not begin until two candidates have
effectively locked up their respective nominations, probably in early March
Before then, candidates will be much more dependent on raising large contributions
of up to $4,000; a candidate preparing to reject the general election public
subsidy can accept a maximum of $4,000 from an individual -- $2,000 for the
primary and $2,000 for the general election campaign. (The money collected for
the fall campaign must be kept in a separate account and returned to donors
if the candidate fails to win the nomination.)
One of the least known but most important dimensions of the early competition
to raise cash is securing the support of men and women who have proven effective
in the past at raising large sums -- usually from a well-tended network of business
associates, corporate subordinates and clients.
The 2004 Bush campaign designated these people as "Pioneers" (raised
$100,000), "Rangers" ($200,000) and "Super Rangers" ($300,000).
Texas lawyer Thomas G. Loeffler, a Bush Ranger in 2004, has already signed
on to help Sen. John McCain (R-Ariz.) in 2008; Northern Virginia real estate
developer Dwight C. Schar, a Ranger in 2004, was on the host committee for a
Super Bowl fundraiser to benefit Sen. George Allen (R-Va.). A senior GOP strategist
said these Bush backers undoubtedly are "being swarmed over" by the
president's would-be successors.
The 2008 fundraising marathon has its roots in the 2000 GOP nominating contest.
Determined not to be outdone by publisher Steve Forbes's ability to self-finance
a campaign, Bush opted out of the federal matching funds system for the Republican
nomination. Instead, he raised $70 million in 1999 -- then a staggering new
record -- and $101.5 million by the time he received the nomination. Since then,
a GOP operative said, other front-runners have been tempted to intimidate rivals
with a "shock and awe" approach to early fundraising.
Former Vermont governor Howard Dean caused a sensation on the Democratic side
by raising $41 million by the end of 2003 for his presidential campaign, much
of it in small donations from grass-roots activists. Though that was double
what eventual nominee Kerry raised in 2003, that kind of money almost certainly
will turn no heads in the next cycle.